Increasing the minimum wage at a time when the poverty rate is the highest it's ever been does not make sense to me. In my reading I found that the economist cited by Tori from UC-Irvine, David Neumark, has done thorough research that found 85% of the studies on minimum wage have discovered a "negative employment effect on low-skilled workers." Increasing the minimum wage does not help those who are living under the poverty level. Most families in poverty don't have a family member who works, so making it more difficult to get a job for these people increases poverty. The reason these people will find it harder to get jobs is that employers will not want to pay a higher wage for an undereducated or minimally educated person. Also, most minimum-wage earners are not the main source of income for their family. According to an article in the Wall Street Journal, "The average family income of a household with a minimum-wage worker is about $47,023- which is far above the poverty line of $23,550 for a family of four." In fact, after the last increase to the minimum wage in July 2009, "600,000 teen jobs disappeared in the next six months, even as GDP expanded." Clearly, raising the minimum wage does not help those who are most stricken by poverty. Finally, increasing the minimum wage to inflation automatically without Congress' approval is not a good idea. This seems to be a case where Congress needs to look at the current economic situation and environment before increasing the cost of employment to employers and thereby resulting in them hiring less people.
After watching Tori’s Vlog regarding Minimum wage, I believe President Obama’s idea of raising the minimum wage to nine dollars is a good idea – for many reasons. I believe that it will cause a growth in employment and more families, who are the lower end of the educational level, will be able to feed their families more. People work from morning to night, receiving only $7.25 per hour, and dying in the midst of poverty. Even though $9.00 dollars is not enough to throw somebody out of poverty, it is a step towards stability. I do not believe that raising the minimum wage is going to affect the free market negatively. Indexing the minimum wage for inflation is justified, I feel like it needs to be done and is good government. I do not think that it necessarily needs Congress vote for small increases in minimum wage. This increase will help all those people who work extremely hard to feed their families such as millions of cooks, janitors, aides to the elderly and other low-wage workers. A New York Times article says that this proposal directly addresses the country’s levels of income inequality, which the White House has tried to reduce with targeted tax credits, a major expansion of health insurance, education and other proposals. The $9 minimum wage would be the highest in more than three decades, accounting for inflation, but still lower than the peaks reached in the 1960s and 1970s.
Just as Tori said, no one really knows what the minimum wage increase would do - whether it would help or not - so I don't see why we shouldn't go ahead and increase it. Obama also wants to raise it by 1.75 over a course of three years - keeping it from being too radical or anything. What's questionable is the whole adjusting for inflation thing. This would make it so that some employers would have to increase wages just about every year. However, it would ALSO mean that the people who by a serious of unfortunate events I'm sure are stuck working for them would not be so far into poverty they can't even look up. It would definitely help people but some people don't care about that kindof stuff so naturally the inflation portion of this bill is what will probably keep it from going anywhere. Apparently 10 states already added inflation adjustment to their minimum wage laws because 14,500 a year is not enough money - it's kind of hard to argue that one. Anyways, the statistics Tori gave pretty much scream that this indexing deal is more than fair.Mitt Romney, during the 2012 election even supported "tying the minimum wage to inflation", even though he took it back later - shocker.
Although either avenue has its disadvantages, I think that the minimum wage should be raised to $9. The cost of living has gone up significantly in the past years, so working class citizens need more money, in order to keep up with rising costs. The Consumer Price Index does not include two of the most important factors: fuel and food. As a result, the minimum wage needs to be raised to help citizens pay for these rising costs, as well. This raise is not primarily designed to get people out of poverty but keep more people from falling into poverty, in order to prevent the destruction of the middle class. Most critics say that it will increase costs for small businesses, however, other inflationary items will be affected as well, like fuel and food. They will either have to be absorbed or passed onto the consumer. This will negatively affect college kids that want to be hired. Due to the raise in minimum wage, businesses will hire less part-time or younger workers because they want more permanent adult employees over temporary younger workers. It is better, however, to have more adults working to provide for families instead of newer wage earners with fewer expenses. Obamacare has not gone into affect yet, which will also affect the costs of businesses. One cannot prevent working employees from the benefits and health insurance that they need, so these raises are indispensable.
While I personally would like it if minimum wage was raised to $9, as I work at a minimum wage job, I'm unsure about the effect it would have on our economy. While I can see some of the potential benefits of this, helping people in minimum wage jobs make more money, I can also see the disadvantages, as Margaret pointed out. I think it is a good idea to go ahead with this plan in increments, as it would allow time for adjustment and changes to be made if anything were to go awry.
I think that it's really hard for anyone to say what the effect of raising the minimum wage would be, but I think it's a good idea to at least try and see what happens as poverty is such a serious issue in our country. I think that along with rises in costs of things, as has happened over the years, people's pay should increase as well. I think that accounting for inflation makes sense if this plan is going to work at all and I don't think it's wrong of President Obama to take control in this situation rather than waiting around for congress, especially since he is not proposing any extremely radical changes.
Ironically enough, I was unaware of a development that could actually have an immediate impact on people my age. Here's my take. Not all minimun wage effects on businesses are necessarily negative. It can reduce turnover: "paying workers more means that they stay longer, meaning lower training costs and greater productivity" says the USnews. Despite a couple pluses, I think there are more effective ways to boost the standard of living (or at least making living easier) among low income workers while minimizing the negative impact on businesses (having to hire less). Mary Cleveland of the Huff Post had an interesting approach. "The proposed federal minimum wage increase will at best benefit a small number of workers, and only until inflation wipes out the real value of the increase. If President Obama really wants to help the working poor, he should propose to mitigate payroll taxes. There are two obvious ways. First, lower the rates--making up the difference by extending the tax to all income beyond the $113,700 cap. Second increase the Earned Income Tax Credit for low wage workers. Both changes would make the tax system more progressive and less destructive." The Making Work Pay tax cut, another one that wasn't extended, would similarly help in this way. The main appeal with this approach is that costs get spread more broadly instead of putting the majority of the burden on businesses (some of which can’t afford them). Usually I'm not gung-ho about raising taxes, but in this case it may be effective.
I think that the increase in minimum wage would be a good thing. If it was increased in increments I think that would give businesses enough time to adjust their financials to raise the amount they pay to their minimum wage workers. As a person who works for minimum wage, I would love for the minimum wage to be increased. With inflation and the cost of living going up, minimum wage needs to go up to match. Especially with the ever-fluxuating gas prices, minimum wage workers need to be able to make enough money to pay for gas to get to work. One negative effect would be that businesses would not be able to pay as many workers because they are paying the workers they have more money. This could possibly lead to lay-offs or people getting fired because businesses can not pay as many workers. However, we do not know if this will happen if we do not try it.
I believe that increasing the federal minimum wage and indexing it to inflation, as suggested by President Obama in his State of the Union Address and discussed in this vlog by Tori, would obviously have both positive and negative effects. According to an article by the Wall Street Journal, "From 2000 to 2010, median income in the U.S.—the point at which half the households make more and half make less—declined 7% after adjusting for inflation, according to Census data. Poverty rates are also at historic levels, with 48.5 million Americans in 2011, or 15.9% of the U.S. population, living in poverty, according to the Census." Certainly something must be done to combat poverty levels, but like some of my classmates, I'm not sold on the idea that increasing the minimum wage is the sole and best way to combat this issue. At the same time, it should be recognized that the value of the minimum wage did sit higher in the 1970's than it does now (adjusted to 2012 inflation rates).
Though I understand the idea of indexing minimum wage to inflation, seeing as Congress has, in recent times, argued about little things for far too long, only to get nothing passed. I think that indexing minimum wage would be fairer to workers. However, I imagine that it could end up being a problem for minimum wage to be constantly fluctuating. I definitely agree that someone working full time should not have to be in poverty, and I disagree with part of Tori's statement about supply and demand. The thing about supply and demand is that it has to be with all other things remaining constant. If there is inflation, then all other things are not remaining constant. Also, if everyone who is working a minimum wage job has more money, that is another factor that would have to be considered when deciding how much it affects the market, so I think that it is much more complicated than it is often made out to be. Another thing about minimum wage increasing is that income tax would also increase, which could help (maybe not a lot, but anything counts) to balance the budget. If people make more money, they also may be able to buy homes that they previously could not afford, increasing property taxes as well. When we have a government that needs money as much as ours does, these small increases in tax dollars could really help.
After reading most of the comments, my opinion still stands. Just as Isabelle stated, with inflation and the cost of living going up, minimum wage simply needs to go up to match. She also said, "this could possibly lead to lay-offs or people getting fired because businesses can not pay as many workers. However, we do not know if this will happen if we do not try it." That's that. I'd just like to ask what else one must do to reduce the poverty levels if one does not want to pay one proper minimum wage? Sure, we can try to raise taxes, as Katie said, but you have to remember - conservatives don't want that either; and I don't think they will want to do anything anytime soon. But the truth is something has to be done - whether it’s raising minimum wage or raising taxes they should probably do something --- anything. Just as Pias originally said, indexing the minimum wage for inflation is justified. I don't get how you can argue it; it only makes sense.
Although I tend to side on most democratic issues, I am not a proponent of minimum wage. I believe supply and demand is a better determining factor of labor wages. The idea that raising minimum wage will help families get out of poverty is probably not going to get that result. There seem to more effective ways to accomplish that like other economists and contributors have proposed such as reducing payroll taxes. Raising minimum wage could also result in less hiring and increased costs for consumers. Of course, I agree that in the United States if you work full-time, you should not be in poverty. So, again if just increasing minimum wage were the answer, I would be all for it. Will raising the minimum wage dampen the economy - I believe it will have some negative effect because increasing costs of doing business will result in less workers being hired and/or increased costs being passed on to consumers. It should help with stabilizing turnover in traditional minimum wage service jobs. I do believe that indexing minimum wage to inflation is a good idea because it will eliminate the need for the continued fight over it and hopefully, free up time to focus on other labor issues.
After re-reading everyone's comments, I still feel like raising the minimum wage is a good indicator, especially for people in the low-end scale of jobs. In order to have food on the table, $9 seems satisfactory. Just as Tori says, that raising the minimum wage - we do not know what would happen (negative or positive), might as well just raise it. It helps for the most part the people who have a labor job. As Gabriella mentioned,the cost of living is going up, therefore raising the minimum wage is necessary. As Gabriella mentions, the CPI does not include fuel and food, which is two of the most important factors. The minimum wage needs to be raised to help citizens pay for all the excessively high raising costs. I agree with Gabriella that "this raise is not designed to get people out of poverty but keep more people from falling into poverty, in order to prevent the destruction of the middle class". I agree with Gretchen that if we raise taxes, the conservatives will not be happy, therefore raising the minimum wage is justified. Something needs to be done to help people who are at the edge of poverty. With cost of living increasing and inflation going up, minimum wage needs to be match up. I agree with Isabelle that "if [the minimum wage] was increased in increments...that would give businesses enough time to adjust their financials to raise the amount they pay to their minimum wage workers". Therefore, I believe raising the minimum wage is justified.
After reading everyone's comments, I do believe we should raise minimum wage. I still think it is a really good idea to raise it by increments. As this would allow for businesses to adjust to the higher rate. Although as Isabelle and others stated, raising minimum wage may lead to layoffs, we will not really know what effect this will have until we implement it. And while tax increases could potentially be a good idea, it would probably take a really long time to implement. And it seems, at least to me, that the minimum wage increase may lead to quicker results, however I could be wrong. I think that it is good President Obama is attempting to do something. And a minimum wage increase will have some benefits I am sure.
I agree with some of the other comments that there could be some negative side effects of raising the minimum wage, but I still think it's a good idea. While it seems like raising it could lead to less people being hired or people being laid off or fired, I think implementing this idea in increments could prevent some of this because it would allow businesses to adjust and keep up with it. No one who is working full time should be in poverty, it just doesn't make sense so I think action needs to be taken and this is a good idea to at least try. I think it would help the economy overall because all minimum wage workers would be making and spending more money, and as Stephanie said, income tax would have to increase at least somewhat.
Gabriella is correct in saying that the cost of living has gone up significantly in the past years. Working class citizens arguably need more money in order to keep up with the rising costs. Others pointed out that if a citizen works full time, they should not be living at the poverty level. I do agree with this to an extent. If a citizen is working full time, they generally are making above the poverty levels. What pushes them below the poverty level is a slew of other situational life variables. Nevertheless, I still skeptical if raising the minimum wage is the most effective way to prevent people from slipping into poverty. Economists predict that inflation will wipe out the real value of the increase relatively quickly. By mitigating payroll taxes for the poorest citizens, the costs get spread more broadly instead of putting the majority of the burden on businesses.
Stephanie brought up a good point that with an increase in income also comes an increase in income tax. This means that more tax money will be flowing into the national revenue and although it may not be much, it could help. To address the point that an increase in minimum wage could lead to higher unemployment, there are many ways that businesses could handle the increase. First, businesses could simply deal with having less profit. Although realistically that would never happen and it's a bit unfair to ask them to do so since they have a right to earn a profit. Second, they could cut back on unnecessary hours. Many businesses spend lots of time training their employees, and if it's a job, say in the fast food industry making burgers, a person does not need that much training. This would save them money by having them come into work to train them on the make line. Third, with the increase in pay an employer could demand more productivity out of a worker. Or an employee could feel that since they now make more, they should be doing more so that they earn their money. I realize that may be a bit idealistic but some people do feel the need to actually "earn" their money while at work. They employee could feel loyal to the company that employees them since they are now paying them more and be less likely to quit to find a higher paying job. This would ultimately lead to less employee turnover which could benefit the business. So the increase in minimum wage wouldn't necessarily be all that bad for businesses if they know how to handle it well.
Most of the working poor already earn more than the minimum wage. In fact, less than 1 percent of all working Americans fall below that income threshold, and the majority of them are above the poverty line. In fact, raising the minimum wage affects only a minuscule portion of Americans. Moreover, approximately 60 percent of that population work part time, and more than half of them are younger than 25. The majority of these jobs are temporary positions held by younger people looking to make a little extra income, not parents desperately trying to keep their families afloat. History shows that lifting the minimum wage inflicts more harm than it alleviates. The predictable consequence of forcing small businesses to pay more for labor than the market can bear will be significant layoffs. These layoffs will disproportionately affect young people, especially young blacks, already battered by our nation’s chronic joblessness. Fewer employees will be working more hours for less. As with any governmental encroachment into the private sector, good yet uninformed intentions lead to unintended consequences. Not only does increasing the minimum wage dampen job creation, it also has a tendency to propel an increase in the high school dropout rate, as higher wages for jobs typically reserved for younger workers entice teens to leave school prematurely.
Isabelle does make a great point about increasing the minimum wage in increments, in order to soften the blow to business owners. This would give them more time to adjust to the raise in employee costs and, subsequently, lead to a less hostile response. In addition, Stephanie provides a good perspective when she points out that the income tax will increase to balance the budget. Although I agree, I do not think that is enough incentive for the business owners that need to pay more for their employees. The income tax will help the government’s budget, but not the business owners themselves, the group most directly hit by this increase. Isabelle also discusses how less training and more productivity from workers will be expected from business owners, which I agree will probably happen after an increase in the minimum wage. The problem arises, however, when business owners start to cut major corners, in order to save money. The quality of a product could go down because of higher costs, and lead to lower standards. This is where our favorite friends, the bureaucrats, need to make sure they are regulating the standards of these businesses. Bureaucracies, like the FDA, must uphold certain standards for food quality, for example, as well as the quality of other products because business owners will probably not act favorably after these increases.
I completely agree with everything that Kirsten said. Namely, that increasing the minimum wage will result in more unemployment. I repeat what I said in my first post that 600,000 teens jobs were lost in 6 months after the last minimum wage increase in 2009, even as the economy grew and expanded. Everyone is talking about alleviating poverty, but the facts are clear: raising the minimum wage does nothing to alleviate poverty. How about we eliminate poverty by creating jobs rather than eliminating jobs? While no one has mentioned this angle yet, it appears that this minimum wage issue has really nothing to do with poverty or unemployment, but is really a political ploy by Mr. Obama to box in Republicans for the 2104 election. Everyone likes the idea of people making more money but the damage to the employment market is not very apparent to most people unless they take the time to study the facts. If Republicans don't go along with the raises then this will allow Democrats to paint them as "out of touch" and uncaring.
As I mentioned, with inflation taken into account, the real wage of those making the minimum wage is less now than it was 40 years ago. According to the economist, since 1979, the real wage for the top 1% has increased by 350% while the wage for the lowest quartile has barely budged. It should be acknowledged that while an increase in the minimum wage may not solve all of the hardships for those at lower end of the economic ladder. Further, increasing minimum wage subject to the ebbs and flows of inflation may help to address the growing income inequality in the United States. Indexing the minimum wage to inflation, ensures those making the minimum wage will not be punished for the fiscal decisions of the government and bankers. Many of my classmates discussed the increase in the cost of living, and based on the information that I have had access to, a federal increase in the minimum wage could combat this issue.
There are many interesting and good points made about raising minimum wage, indexing it to inflation and whether it will have a positive or negative effect on the economy, unemployment and poverty levels. All of the research I could find seems to be pretty split on these issues, too. Negative-raising the minimum wage may lead to less hiring, it could lead to some layoffs and higher business costs that could be passed on to consumers. Positive- higher minimum wage should help with less employee turnover which will cost employers less in the long run, a higher minimum wage could lead to more money being spent locally, lessen the wage gap. Reading the comments, it is obvious that we all agree that if you are working full time in the United States, you should not be in poverty. Many still feel it doesn't change those living in poverty but maybe this will lead to more ideas and discussions to do more to help fix this unfortunate situation. I still think if it is going to be increased, indexing it is a good idea because Congress won't have to waste time and money debating this and it is a good idea to increase it incrementally so the impact is gradual to businesses.
As a teen who has a job right now I feel that raising the minimum wage is a good idea. I do agree with many others and their interest in whether or not this will harm or hurt the economy. But, personally I wonder what affect this will have on the current poverty situation. However, with so many companies going out of business... could an increase in minimum wage cause the number of companies failing to increase? After reviewing everyone's comments I am torn on what I believe... it would be nice to take more money home every two weeks but I think overall it maybe more beneficial for our economy to keep it at the current level.
Increasing the minimum wage at a time when the poverty rate is the highest it's ever been does not make sense to me. In my reading I found that the economist cited by Tori from UC-Irvine, David Neumark, has done thorough research that found 85% of the studies on minimum wage have discovered a "negative employment effect on low-skilled workers." Increasing the minimum wage does not help those who are living under the poverty level. Most families in poverty don't have a family member who works, so making it more difficult to get a job for these people increases poverty. The reason these people will find it harder to get jobs is that employers will not want to pay a higher wage for an undereducated or minimally educated person. Also, most minimum-wage earners are not the main source of income for their family. According to an article in the Wall Street Journal, "The average family income of a household with a minimum-wage worker is about $47,023- which is far above the poverty line of $23,550 for a family of four." In fact, after the last increase to the minimum wage in July 2009, "600,000 teen jobs disappeared in the next six months, even as GDP expanded." Clearly, raising the minimum wage does not help those who are most stricken by poverty. Finally, increasing the minimum wage to inflation automatically without Congress' approval is not a good idea. This seems to be a case where Congress needs to look at the current economic situation and environment before increasing the cost of employment to employers and thereby resulting in them hiring less people.
ReplyDeleteAfter watching Tori’s Vlog regarding Minimum wage, I believe President Obama’s idea of raising the minimum wage to nine dollars is a good idea – for many reasons. I believe that it will cause a growth in employment and more families, who are the lower end of the educational level, will be able to feed their families more. People work from morning to night, receiving only $7.25 per hour, and dying in the midst of poverty. Even though $9.00 dollars is not enough to throw somebody out of poverty, it is a step towards stability. I do not believe that raising the minimum wage is going to affect the free market negatively. Indexing the minimum wage for inflation is justified, I feel like it needs to be done and is good government. I do not think that it necessarily needs Congress vote for small increases in minimum wage. This increase will help all those people who work extremely hard to feed their families such as millions of cooks, janitors, aides to the elderly and other low-wage workers. A New York Times article says that this proposal directly addresses the country’s levels of income inequality, which the White House has tried to reduce with targeted tax credits, a major expansion of health insurance, education and other proposals. The $9 minimum wage would be the highest in more than three decades, accounting for inflation, but still lower than the peaks reached in the 1960s and 1970s.
ReplyDeleteJust as Tori said, no one really knows what the minimum wage increase would do - whether it would help or not - so I don't see why we shouldn't go ahead and increase it. Obama also wants to raise it by 1.75 over a course of three years - keeping it from being too radical or anything.
ReplyDeleteWhat's questionable is the whole adjusting for inflation thing. This would make it so that some employers would have to increase wages just about every year. However, it would ALSO mean that the people who by a serious of unfortunate events I'm sure are stuck working for them would not be so far into poverty they can't even look up. It would definitely help people but some people don't care about that kindof stuff so naturally the inflation portion of this bill is what will probably keep it from going anywhere.
Apparently 10 states already added inflation adjustment to their minimum wage laws because 14,500 a year is not enough money - it's kind of hard to argue that one. Anyways, the statistics Tori gave pretty much scream that this indexing deal is more than fair.Mitt Romney, during the 2012 election even supported "tying the minimum wage to inflation", even though he took it back later - shocker.
ReplyDeleteAlthough either avenue has its disadvantages, I think that the minimum wage should be raised to $9. The cost of living has gone up significantly in the past years, so working class citizens need more money, in order to keep up with rising costs. The Consumer Price Index does not include two of the most important factors: fuel and food. As a result, the minimum wage needs to be raised to help citizens pay for these rising costs, as well. This raise is not primarily designed to get people out of poverty but keep more people from falling into poverty, in order to prevent the destruction of the middle class. Most critics say that it will increase costs for small businesses, however, other inflationary items will be affected as well, like fuel and food. They will either have to be absorbed or passed onto the consumer. This will negatively affect college kids that want to be hired. Due to the raise in minimum wage, businesses will hire less part-time or younger workers because they want more permanent adult employees over temporary younger workers. It is better, however, to have more adults working to provide for families instead of newer wage earners with fewer expenses. Obamacare has not gone into affect yet, which will also affect the costs of businesses. One cannot prevent working employees from the benefits and health insurance that they need, so these raises are indispensable.
While I personally would like it if minimum wage was raised to $9, as I work at a minimum wage job, I'm unsure about the effect it would have on our economy. While I can see some of the potential benefits of this, helping people in minimum wage jobs make more money, I can also see the disadvantages, as Margaret pointed out. I think it is a good idea to go ahead with this plan in increments, as it would allow time for adjustment and changes to be made if anything were to go awry.
ReplyDeleteI think that it's really hard for anyone to say what the effect of raising the minimum wage would be, but I think it's a good idea to at least try and see what happens as poverty is such a serious issue in our country. I think that along with rises in costs of things, as has happened over the years, people's pay should increase as well. I think that accounting for inflation makes sense if this plan is going to work at all and I don't think it's wrong of President Obama to take control in this situation rather than waiting around for congress, especially since he is not proposing any extremely radical changes.
ReplyDeleteIronically enough, I was unaware of a development that could actually have an immediate impact on people my age.
ReplyDeleteHere's my take.
Not all minimun wage effects on businesses are necessarily negative. It can reduce turnover: "paying workers more means that they stay longer, meaning lower training costs and greater productivity" says the USnews.
Despite a couple pluses, I think there are more effective ways to boost the standard of living (or at least making living easier) among low income workers while minimizing the negative impact on businesses (having to hire less).
Mary Cleveland of the Huff Post had an interesting approach.
"The proposed federal minimum wage increase will at best benefit a small number of workers, and only until inflation wipes out the real value of the increase. If President Obama really wants to help the working poor, he should propose to mitigate payroll taxes. There are two obvious ways. First, lower the rates--making up the difference by extending the tax to all income beyond the $113,700 cap. Second increase the Earned Income Tax Credit for low wage workers. Both changes would make the tax system more progressive and less destructive."
The Making Work Pay tax cut, another one that wasn't extended, would similarly help in this way.
The main appeal with this approach is that costs get spread more broadly instead of putting the majority of the burden on businesses (some of which can’t afford them).
Usually I'm not gung-ho about raising taxes, but in this case it may be effective.
I think that the increase in minimum wage would be a good thing. If it was increased in increments I think that would give businesses enough time to adjust their financials to raise the amount they pay to their minimum wage workers. As a person who works for minimum wage, I would love for the minimum wage to be increased. With inflation and the cost of living going up, minimum wage needs to go up to match. Especially with the ever-fluxuating gas prices, minimum wage workers need to be able to make enough money to pay for gas to get to work. One negative effect would be that businesses would not be able to pay as many workers because they are paying the workers they have more money. This could possibly lead to lay-offs or people getting fired because businesses can not pay as many workers. However, we do not know if this will happen if we do not try it.
ReplyDeleteI believe that increasing the federal minimum wage and indexing it to inflation, as suggested by President Obama in his State of the Union Address and discussed in this vlog by Tori, would obviously have both positive and negative effects. According to an article by the Wall Street Journal, "From 2000 to 2010, median income in the U.S.—the point at which half the households make more and half make less—declined 7% after adjusting for inflation, according to Census data. Poverty rates are also at historic levels, with 48.5 million Americans in 2011, or 15.9% of the U.S. population, living in poverty, according to the Census." Certainly something must be done to combat poverty levels, but like some of my classmates, I'm not sold on the idea that increasing the minimum wage is the sole and best way to combat this issue. At the same time, it should be recognized that the value of the minimum wage did sit higher in the 1970's than it does now (adjusted to 2012 inflation rates).
ReplyDeleteThough I understand the idea of indexing minimum wage to inflation, seeing as Congress has, in recent times, argued about little things for far too long, only to get nothing passed. I think that indexing minimum wage would be fairer to workers. However, I imagine that it could end up being a problem for minimum wage to be constantly fluctuating. I definitely agree that someone working full time should not have to be in poverty, and I disagree with part of Tori's statement about supply and demand. The thing about supply and demand is that it has to be with all other things remaining constant. If there is inflation, then all other things are not remaining constant. Also, if everyone who is working a minimum wage job has more money, that is another factor that would have to be considered when deciding how much it affects the market, so I think that it is much more complicated than it is often made out to be. Another thing about minimum wage increasing is that income tax would also increase, which could help (maybe not a lot, but anything counts) to balance the budget. If people make more money, they also may be able to buy homes that they previously could not afford, increasing property taxes as well. When we have a government that needs money as much as ours does, these small increases in tax dollars could really help.
ReplyDeleteAfter reading most of the comments, my opinion still stands. Just as Isabelle stated, with inflation and the cost of living going up, minimum wage simply needs to go up to match. She also said, "this could possibly lead to lay-offs or people getting fired because businesses can not pay as many workers. However, we do not know if this will happen if we do not try it." That's that.
ReplyDeleteI'd just like to ask what else one must do to reduce the poverty levels if one does not want to pay one proper minimum wage? Sure, we can try to raise taxes, as Katie said, but you have to remember - conservatives don't want that either; and I don't think they will want to do anything anytime soon. But the truth is something has to be done - whether it’s raising minimum wage or raising taxes they should probably do something --- anything. Just as Pias originally said, indexing the minimum wage for inflation is justified. I don't get how you can argue it; it only makes sense.
Although I tend to side on most democratic issues, I am not a proponent of minimum wage. I believe supply and demand is a better determining factor of labor wages.
ReplyDeleteThe idea that raising minimum wage will help families get out of poverty is probably not going to get that result. There seem to more effective ways to accomplish that like other economists and contributors have proposed such as reducing payroll taxes. Raising minimum wage could also result in less hiring and increased costs for consumers.
Of course, I agree that in the United States if you work full-time, you should not be in poverty. So, again if just increasing minimum wage were the answer, I would be all for it.
Will raising the minimum wage dampen the economy - I believe it will have some negative effect because increasing costs of doing business will result in less workers being hired and/or increased costs being passed on to consumers. It should help with stabilizing turnover in traditional minimum wage service jobs.
I do believe that indexing minimum wage to inflation is a good idea because it will eliminate the need for the continued fight over it and hopefully, free up time to focus on other labor issues.
After re-reading everyone's comments, I still feel like raising the minimum wage is a good indicator, especially for people in the low-end scale of jobs. In order to have food on the table, $9 seems satisfactory. Just as Tori says, that raising the minimum wage - we do not know what would happen (negative or positive), might as well just raise it. It helps for the most part the people who have a labor job. As Gabriella mentioned,the cost of living is going up, therefore raising the minimum wage is necessary. As Gabriella mentions, the CPI does not include fuel and food, which is two of the most important factors. The minimum wage needs to be raised to help citizens pay for all the excessively high raising costs. I agree with Gabriella that "this raise is not designed to get people out of poverty but keep more people from falling into poverty, in order to prevent the destruction of the middle class". I agree with Gretchen that if we raise taxes, the conservatives will not be happy, therefore raising the minimum wage is justified. Something needs to be done to help people who are at the edge of poverty. With cost of living increasing and inflation going up, minimum wage needs to be match up. I agree with Isabelle that "if [the minimum wage] was increased in increments...that would give businesses enough time to adjust their financials to raise the amount they pay to their minimum wage workers". Therefore, I believe raising the minimum wage is justified.
ReplyDeleteAfter reading everyone's comments, I do believe we should raise minimum wage. I still think it is a really good idea to raise it by increments. As this would allow for businesses to adjust to the higher rate. Although as Isabelle and others stated, raising minimum wage may lead to layoffs, we will not really know what effect this will have until we implement it. And while tax increases could potentially be a good idea, it would probably take a really long time to implement. And it seems, at least to me, that the minimum wage increase may lead to quicker results, however I could be wrong. I think that it is good President Obama is attempting to do something. And a minimum wage increase will have some benefits I am sure.
ReplyDeleteI agree with some of the other comments that there could be some negative side effects of raising the minimum wage, but I still think it's a good idea. While it seems like raising it could lead to less people being hired or people being laid off or fired, I think implementing this idea in increments could prevent some of this because it would allow businesses to adjust and keep up with it. No one who is working full time should be in poverty, it just doesn't make sense so I think action needs to be taken and this is a good idea to at least try. I think it would help the economy overall because all minimum wage workers would be making and spending more money, and as Stephanie said, income tax would have to increase at least somewhat.
ReplyDeleteGabriella is correct in saying that the cost of living has gone up significantly in the past years. Working class citizens arguably need more money in order to keep up with the rising costs. Others pointed out that if a citizen works full time, they should not be living at the poverty level. I do agree with this to an extent. If a citizen is working full time, they generally are making above the poverty levels. What pushes them below the poverty level is a slew of other situational life variables.
ReplyDeleteNevertheless, I still skeptical if raising the minimum wage is the most effective way to prevent people from slipping into poverty. Economists predict that inflation will wipe out the real value of the increase relatively quickly. By mitigating payroll taxes for the poorest citizens, the costs get spread more broadly instead of putting the majority of the burden on businesses.
Stephanie brought up a good point that with an increase in income also comes an increase in income tax. This means that more tax money will be flowing into the national revenue and although it may not be much, it could help.
ReplyDeleteTo address the point that an increase in minimum wage could lead to higher unemployment, there are many ways that businesses could handle the increase. First, businesses could simply deal with having less profit. Although realistically that would never happen and it's a bit unfair to ask them to do so since they have a right to earn a profit. Second, they could cut back on unnecessary hours. Many businesses spend lots of time training their employees, and if it's a job, say in the fast food industry making burgers, a person does not need that much training. This would save them money by having them come into work to train them on the make line. Third, with the increase in pay an employer could demand more productivity out of a worker. Or an employee could feel that since they now make more, they should be doing more so that they earn their money. I realize that may be a bit idealistic but some people do feel the need to actually "earn" their money while at work. They employee could feel loyal to the company that employees them since they are now paying them more and be less likely to quit to find a higher paying job. This would ultimately lead to less employee turnover which could benefit the business. So the increase in minimum wage wouldn't necessarily be all that bad for businesses if they know how to handle it well.
Most of the working poor already earn more than the minimum wage. In fact, less than 1 percent of all working Americans fall below that income threshold, and the majority of them are above the poverty line. In fact, raising the minimum wage affects only a minuscule portion of Americans.
ReplyDeleteMoreover, approximately 60 percent of that population work part time, and more than half of them are younger than 25. The majority of these jobs are temporary positions held by younger people looking to make a little extra income, not parents desperately trying to keep their families afloat.
History shows that lifting the minimum wage inflicts more harm than it alleviates. The predictable consequence of forcing small businesses to pay more for labor than the market can bear will be significant layoffs. These layoffs will disproportionately affect young people, especially young blacks, already battered by our nation’s chronic joblessness. Fewer employees will be working more hours for less.
As with any governmental encroachment into the private sector, good yet uninformed intentions lead to unintended consequences. Not only does increasing the minimum wage dampen job creation, it also has a tendency to propel an increase in the high school dropout rate, as higher wages for jobs typically reserved for younger workers entice teens to leave school prematurely.
Isabelle does make a great point about increasing the minimum wage in increments, in order to soften the blow to business owners. This would give them more time to adjust to the raise in employee costs and, subsequently, lead to a less hostile response. In addition, Stephanie provides a good perspective when she points out that the income tax will increase to balance the budget. Although I agree, I do not think that is enough incentive for the business owners that need to pay more for their employees. The income tax will help the government’s budget, but not the business owners themselves, the group most directly hit by this increase. Isabelle also discusses how less training and more productivity from workers will be expected from business owners, which I agree will probably happen after an increase in the minimum wage. The problem arises, however, when business owners start to cut major corners, in order to save money. The quality of a product could go down because of higher costs, and lead to lower standards. This is where our favorite friends, the bureaucrats, need to make sure they are regulating the standards of these businesses. Bureaucracies, like the FDA, must uphold certain standards for food quality, for example, as well as the quality of other products because business owners will probably not act favorably after these increases.
ReplyDeleteI completely agree with everything that Kirsten said. Namely, that increasing the minimum wage will result in more unemployment. I repeat what I said in my first post that 600,000 teens jobs were lost in 6 months after the last minimum wage increase in 2009, even as the economy grew and expanded. Everyone is talking about alleviating poverty, but the facts are clear: raising the minimum wage does nothing to alleviate poverty. How about we eliminate poverty by creating jobs rather than eliminating jobs? While no one has mentioned this angle yet, it appears that this minimum wage issue has really nothing to do with poverty or unemployment, but is really a political ploy by Mr. Obama to box in Republicans for the 2104 election. Everyone likes the idea of people making more money but the damage to the employment market is not very apparent to most people unless they take the time to study the facts. If Republicans don't go along with the raises then this will allow Democrats to paint them as "out of touch" and uncaring.
ReplyDeleteAs I mentioned, with inflation taken into account, the real wage of those making the minimum wage is less now than it was 40 years ago. According to the economist, since 1979, the real wage for the top 1% has increased by 350% while the wage for the lowest quartile has barely budged. It should be acknowledged that while an increase in the minimum wage may not solve all of the hardships for those at lower end of the economic ladder. Further, increasing minimum wage subject to the ebbs and flows of inflation may help to address the growing income inequality in the United States. Indexing the minimum wage to inflation, ensures those making the minimum wage will not be punished for the fiscal decisions of the government and bankers. Many of my classmates discussed the increase in the cost of living, and based on the information that I have had access to, a federal increase in the minimum wage could combat this issue.
ReplyDeleteThere are many interesting and good points made about raising minimum wage, indexing it to inflation and whether it will have a positive or negative effect on the economy, unemployment and poverty levels. All of the research I could find seems to be pretty split on these issues, too. Negative-raising the minimum wage may lead to less hiring, it could lead to some layoffs and higher business costs that could be passed on to consumers. Positive- higher minimum wage should help with less employee turnover which will cost employers less in the long run, a higher minimum wage could lead to more money being spent locally, lessen the wage gap. Reading the comments, it is obvious that we all agree that if you are working full time in the United States, you should not be in poverty. Many still feel it doesn't change those living in poverty but maybe this will lead to more ideas and discussions to do more to help fix this unfortunate situation. I still think if it is going to be increased, indexing it is a good idea because Congress won't have to waste time and money debating this and it is a good idea to increase it incrementally so the impact is gradual to businesses.
ReplyDeleteAs a teen who has a job right now I feel that raising the minimum wage is a good idea. I do agree with many others and their interest in whether or not this will harm or hurt the economy. But, personally I wonder what affect this will have on the current poverty situation. However, with so many companies going out of business... could an increase in minimum wage cause the number of companies failing to increase? After reviewing everyone's comments I am torn on what I believe... it would be nice to take more money home every two weeks but I think overall it maybe more beneficial for our economy to keep it at the current level.
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